Summary of Key Points from the Conference Call Industry Overview - **Industry**: U.S. Machinery and Electricals - **Focus**: Impact of recent policy changes by the Trump Administration on various sub-sectors including electricals, construction, agriculture, and trucks [1][11] Core Insights and Arguments 1. Policy Impact on Renewables - The Trump Administration's policies are de-prioritizing renewables, negatively impacting companies like Quanta (PWR) which derives 30% of sales from this sector [2][49] - The OBBBA cuts tax credits for renewables, shortening the eligibility timeframe from 2032 to 2027, leading to a projected slowdown in construction activity post-2025 [16][54] - Construction costs are rising due to stricter domestic content requirements and tariffs, which could drive renewables to ex-growth from 2025-2030 [2][18] 2. Construction Sector Stimulus - The reinstatement of 100% bonus depreciation for qualified property under the OBBBA is expected to stimulate construction activity, unlocking nearly $90 billion in additional non-residential construction spending, a 7% increase compared to 2024 levels [3][67] - This change is anticipated to benefit construction OEMs such as OSK, URI, ETN, CAT, TRMB, HUBB, DE, and J [3][12] 3. Agriculture Equipment Demand - Changes in biofuels policy, including a 75% increase in biomass-based diesel production mandated by the EPA, could lead to a 10% increase in agricultural equipment demand [4][84] - The extension of clean fuel tax credits from 2027 to 2029 and increased subsidies for biofuels are expected to positively impact companies like Deere, AGCO, and CNH [4][101] 4. Truck OEM Competitive Landscape - The Section 232 investigation into commercial vehicle manufacturing is likely to favor U.S.-based manufacturers like PACCAR (PCAR) by reversing the current tariff structure that disadvantages U.S. manufacturers [5][104] - Current tariffs create a cost disadvantage for U.S. truck manufacturers, as they face higher costs due to imported components [107][110] Additional Important Insights - The overall economic reorientation towards investment rather than consumption is expected to benefit the machinery and electrical sectors [13] - The anticipated slowdown in renewable energy construction does not imply a complete decline, as electricity demand continues to grow at a CAGR of 1.5-2% [28][40] - Historical context indicates that previous cuts to renewable tax credits led to significant underperformance in the sector, suggesting potential risks ahead [46] - The bonus depreciation changes are expected to lead to mid-single-digit earnings growth for companies like Oshkosh, Eaton, and United Rentals [79][82] Company Ratings and Price Targets - **Outperform Ratings**: Trimble (TP $99), Jacobs (TP $163), PACCAR (TP $118), Eaton (TP $410), Hubbell (TP $511) [7][8] - **Market-Perform Ratings**: AGCO (TP $118), Caterpillar (TP $447), Deere (TP $548), Cummins (TP $385), United Rentals (TP $885), Titan America (TP $15), Oshkosh (TP $132), Quanta (TP $410) [7][8] This summary encapsulates the key points discussed in the conference call, highlighting the implications of policy changes on various sectors and companies within the U.S. Machinery and Electricals industry.

Financial Data and Key Metrics Changes - AFFO per share for the quarter was $0.60, an increase of 4.9% compared to $0.57 for the same quarter in 2024 [22] - The midpoint of the revised 2025 guidance now calls for 4.4% growth in AFFO per share versus 2024 [10][23] - Total debt is $17.1 billion with a net debt to annualized second quarter adjusted EBITDA of approximately 5.1 times, within the target leverage range of 5 to 5.5 times [21] Business Line Data and Key Metrics Changes - VICI's same store NOI growth rate is over five times higher than the average projected rate for net lease REITs [11] - The company is generating earnings growth through a combination of same store earnings growth and new store external growth [10] Market Data and Key Metrics Changes - Las Vegas has experienced a period of normalization after years of record-breaking growth, with higher-end properties still running at over 90% occupancy levels [17] - The lower-end consumer has declined recently, prompting operators to adjust strategies to attract budget-conscious visitors [17] Company Strategy and Development Direction - The company emphasizes the importance of dividends in creating value for shareholders, focusing on total return through dividend return and earnings growth [7][8] - VICI is cultivating relationships with best-in-class operating partners and diversifying investments beyond gaming, including theme parks and youth sports [15][98] Management's Comments on Operating Environment and Future Outlook - Management remains confident in Las Vegas's long-term trajectory despite recent declines in visitation and gaming revenue [17] - The company believes its rental income is insulated from cyclical fluctuations due to long-term leases with corporate guarantees [18] Other Important Information - The company raised its AFFO guidance for 2025, now expecting between $2.5 billion and $2.52 billion, or between $2.35 and $2.37 per diluted common share [23] - VICI's capital markets independence allows it to generate earnings growth without significant reliance on external funding [12] Q&A Session Summary Question: What drove the decision to increase your mezzanine loan investment on the 1 Beverly Hills by $150 million? - The increase is part of a larger financing effort for a $6 billion project, with expectations of further commitments as construction financing progresses [26] Question: Are you seeing or expecting any fee simple opportunities from these relationships? - There is potential for fee simple opportunities, particularly with partners like Kane and Eldridge, as they expand their investments [28] Question: How have deal discussions been for sale-leaseback or other loans recently? - There have been no significant changes in deal discussions, with continued activity across various sectors [32] Question: What are your views on iGaming proliferation? - The company monitors iGaming developments closely, as it is important for many tenants and their overall credit [36] Question: Are there good opportunities for debt investments? - There appears to be more credit opportunities than real estate transaction opportunities currently [42] Question: How do you feel about the regional gaming markets? - The company remains excited about the gaming industry overall, with positive trends in regional markets [48] Question: What are your thoughts on the Caesars Forum Convention Center call option? - The company is assessing the opportunity and has time to evaluate its options regarding the asset [90] Question: How are you seeing the performance of Canadian properties amid declining visitation to Las Vegas? - Performance of Canadian assets has been strong, with indications that more Canadians are visiting local properties [72]

Tax Law Impact on Private Jet Industry - New tax law allows immediate write-off of the entire purchase price of private jets, known as bonus depreciation [1] - Bonus depreciation, originally passed in 2017, was brought back, enabling companies to write off 100% of the purchase price of capital equipment, including private jets used for business [1] - The full purchase price of a private jet can be written off on taxes in the year of purchase, retroactive to January of this year [2][3] Conditions and Implications - The jet must be used for qualified business activities, not personal use [2] - The benefit applies to both new and pre-owned planes [2] - For example, a $10 million Gulfstream purchase can deduct the entire $10 million from taxable income [3] Market Outlook - Brokers anticipate a demand spike starting in September due to the tax change [4] - The private jet industry had been slowing after peak demand [3]

Tax Bill Impact - Approximately 80% of the tax bill's benefits accrue to the top 10% of earners [2] - The bottom 20% could see a decrease in after-tax income of $560 per year, a 2.3% decrease [3] - The middle 20% would see a slight gain of $760 per year, or 1.5% [3] - The top quintile receives a $6,000 cut, about 2.3% [4] - The top 1%, those making $650,000 or more, get a tax cut of about $32,000 a year, 2.1% [4] Tax Policy Details - Extending the standard deduction costs $1.4 trillion [4] - Child tax credit costs $800 billion [4] - Eliminating tax on tips and overtime costs over $120 billion [5] - Bonus depreciation allows businesses to deduct 100% of capital investments immediately, retroactive to January 2025 [8] Regional and Temporal Considerations - The extension of the salt deduction is a positive change for those in high tax blue states, up to $500,000 in income, phasing out in 5 years [6] - Many provisions of the tax bill are set to expire in approximately 5 years due to budgetary reasons [7]

Market Trends - Private jet travel remains strong despite slowing commercial airline travel [1] - Flights to/within Europe are popular among Americans, but fewer wealthy Europeans are traveling to the US [2] - The Sun Belt is rising in popularity for private jet travel, with West Palm Beach becoming the second busiest private jet airport in the US [3] - Locations like Palm Beach, Naples, Florida, and Scottsdale are experiencing less seasonality and becoming busy year-round [4] - Austin, Texas, Nashville, and Columbus, Ohio are seeing increases in private jet traffic [4] Tax and Financial Implications - Bonus depreciation, allowing immediate write-off of the full value of jets, is likely to pass in both the House and Senate bills, boosting the private jet business [5] NetJets Performance - NetJets sees no signs of a slowdown among its 13,600 owners and over 1,000 planes [2] Miscellaneous - 25,000 pets flew on private jets last year [8]